Re: {LONGTERMINVESTORS} MANISH CHOKANI, Enam director..Thread
RAJESH DESAI
See great opportunity for long-term value investors: Enam
More than 300 investors and almost a 100 corporates are participating in Enam Securities’ annual conference ‘India 2020 stars’.
On the sidelines of the conference, Manish Chokhani, managing director and chief executive officer and Dharmesh Mehta, managing director institutional equities of Enam Securities speak to CNBC-TV18’s Udayan Mukherjee.
They say, there is a great opportunity for long-term value investors. “Long only investors are coming back to India.”
According to them, peak in inflation and interest rates is behind market now. They further say, money flow will now be dependent on key policy reforms.
Below is the edited transcript of the interview. Also watch the accompanying videos.
Q: What are you telling your investors at the conference?
Chokhani: We are extremely enthused by the fact that unlike last year where we saw a lot of newer investors coming in, this time I am seeing a lot of our older long only, deep value, hard seasoned India investors coming back. That’s an extremely encouraging sign.
The second thing, which we will from our side try and put out, is when chips are down, actually it is the best time to go out shopping. Typically, new bull markets are led by newer people and newer companies. So, we are trying to get people from not just the spectrum of companies which are represented in the index, but also in keeping with the theme I have been talking a lot about the new emerging leaders.
We’ll be ending with a panel of the 40-year old CEOs. We’ll also be talking to the iconic Deepak Parikh on the first day. Hopefully, we can put out a message of hope and optimism. And that is what investors thrive on.
Q: Last November, when you had the conference, the market was almost at the top. And then for the next 12 months to this conference, we have just had a big down way from that time onwards. Are you getting the sense that has flushed out some of the young faces who came in to chase momentum at that point and now the old blue blooded money is beginning to hunt for value?
Mehta: That’s true. You can see from the investors who have come in. They are people who are seeing India from the last 10-15 years and have been here from a long time.
Clearly you are seeing people, who believe in the India story, coming in rather than the momentum players. In fact for them this timing is great because this is a time when you get India at a good valuation and you can take large positions. So, they are actually much happier to come at this time around rather than at that kind of momentum period which was there last year.
In this month, there are almost four-five conferences happening in India. So, clearly this is a great opportunity for long-term value investors to come and take large positions right now.
Q: Do you get the sense from interacting with them that they are ready to press the trigger just yet or is it going to be a very slow process of deployment?
Mehta: Ofcourse they have to take the global macro view into consideration, when they are timing this. But they are waiting for trigger points from India and not from US or Europe.
If they see government taking some action on the capex cycle, interest rates, and inflation, automatically you will see a lot more flows coming in.
In 2011, when you are talking till date, the FII inflows have been roughly about USD 200-300 million, so almost flat. So, despite the kind of thing, which has not happened in India, nobody sold out India in such a big way.
They are all hoping that we will see some action in the government finally. And that is the time you will actually start seeing large inflows coming in.
Q: We are just ten days away from the start of the winter session of parliament. All the global investors have been very disappointed for the last one year. Does it come up in your conversations that will this government move, will there be some policy action which will basically show us India in a far better relative light?
Chokhani: Yes. I think people are looking for that. The good news really from our investors’ perspective is that the expectations are just so low that no one is really expected anything to come out. So, anything that comes out will probably be seen as a positive in India.
The second thing is that it is not just FIIs who are here, there are very large Indian investors as well. When we classify FIIs, they are all not one class. So, while some people are enthused in saying this is great time because the peak of India's problems now seem to be behind us.
There is another category obviously that believes that there is some time on our side, the world is going to be a sluggish place and we have time to shop. So, I don’t want to portray as if people will come to our conference and then next week we will see a lot of buying. At the end of the day, it’s a market place, there would be buyers, there would be sellers.
German intermediaries have put the best picture forward for India realistically. I don’t think I am just trying to paint an extremely optimistic picture which may not be grounded in reality. At the same time, I don’t think one is trying to join the bandwagon which says nothing can happen in India.
Last Diwali, the mood coming out from Singapore was extremely distressing. So, the truth lies somewhere in between. While we haven’t done a few things right, the fact is we will hopefully portray through the conference and through the companies. There is good rate of change atleast at the company level. On the very least, if nothing happens to the markets, some companies are doing well and are making profits for themselves.
Q: I heard you say that there are fewer hedge funds at the conference, more long only. Do you think the positioning of investors has changed as well from very utterly bearish position about a month or two back? Do you think underweight positions or bearish positions have been neutralised to a certain extent?
Mehta: I do think so. I think people are still underweight on India. There is still some short covering left to happen, in case things fall in place for India right now. This is the time when investors try to decide which country should get over allocation.
India has underperformed massively this year. So, may be this is the reason why people are coming more to India to check whether next year India can outperform.
Q: Essar Ports has been the biggest star recently. How are some of these large asset owners feeling about conditions right now because some of them have been beaten to pulp in the market?
Chokhani: Essar, in particular, is a very interesting case. This year itself the group has had an inflow of USD 9 billion, if I aggregate the money from the Vodafone sale as well as the Essar PLC listing. They have received equity money effectively into the group at a time when most people are struggling for equity.
A lot of the expansions, which were eminent to be completed, are almost at final stage of completion. Essar Refinery, for example, will double its complexity level and will go online next year. Essar Port is already listed. In their power projects, they would probably have ended up with 4,500-5,000 MW by sometime next year as probable plan of building 10,000 MW.
There could be a lot of groups for whom this could be a better time because assets are coming into production, equity has just been received and there is no eminent threat of anything going wrong for them in their business. In this specific case, they end up owing almost 90% of all their companies themselves. So, I just thought it could be a very interesting.
Prashant Ruia (Essar Group Chief Executive) is among the young leaders of India. He is in his 40s currently.
Thanks a lotOn Sat, Oct 29, 2011 at 8:09 PM, RAJESH DESAI <stock...@gmail.com> wrote:
reports are attached.--On Sat, Oct 29, 2011 at 5:21 PM, MALLI RAO <mallimar...@gmail.com> wrote:
Hi
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INDIA 2015: Rip van Winkle in India 2015: Did it or did it not happen
Indian consumer :Winners from $3.6trn Indian consumer opportunity
Thanks
MalliOn Sat, Oct 29, 2011 at 4:00 PM, RAJESH DESAI <stock...@gmail.com> wrote:
Market Guru with Manish Chokhani : Videos on YourMoneySite.com
25 Oct, In an exclusive interview with Bloomberg UTV, Manish Chokhani of Enam Securities gave the market outlook ...
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